....What should the penalty to the banks be ( if any )? Should these people that could not or would not pay their mortgages ( could not and would not are quite different ) end up with free homes, because fraud was committed? Why should a deadbeat have a better result than someone who really struggled to keep current on their mortgage?

Those people that were responsible and did not fall behind in their mortgages. They are being screwed by losing equity. Are they due anything?

Quote:

Originally Posted by Piobaire

Why can't those of us that have been paying our mortgages get some free shit too?

this. to add the more the banks get fuked the worse it is i think for the economy at large. those who are trying to pay their bills have decent access to jobs and credit shit like this does not help at all. the tighter the banks get the worse off we are.

Quote:

Originally Posted by Fraiche

Why would anyone believe people would get free houses? The most they should get is there money back, which probably wasn't much anyways.

once the contract is considered breached, void what have you, if the legality works out in your favor the bank looses claim to the house and the money they lent. the can no longer legally take the asset back as the loan is null and void. i could be wrong but this is my understanding

Btw, thanks for all the intelligent input guys. IMO this is a very important topic and some first hand knowledge input is greatly appreciated by folks like me that are not involved in the various industry facets of this.

once the contract is considered breached, void what have you, if the legality works out in your favor the bank looses claim to the house and the money they lent. the can no longer legally take the asset back as the loan is null and void. i could be wrong but this is my understanding

I wish somebody with RE law knowledge could chime in.

I ineloquently said this situation could turn out to be a shitstorm if people who are deadbeats start to get free homes. It would be.

And obviously, this would be terrible and in no way good for the economy.

I seem to recall reading some recent stories about this kind of stuff. Any of you lawyers know of specific cases or case law that has to do with stuff like this?

piobaire you've really worked hard on the smug dismissiveness over the last 6 months. i don't really have an ideological stake on either side of this.

He's clearly correct in this instance (and many others), but the way he says these things makes me wonder why everyone decided to stop calling him Pedobaire; I would think given his behaviour he doesn't really warrant others' deferring to his preferences on grounds of tact and class.

I ineloquently said this situation could turn out to be a shitstorm if people who are deadbeats start to get free homes. It would be.

And obviously, this would be terrible and in no way good for the economy.

I seem to recall reading some recent stories about this kind of stuff. Any of you lawyers know of specific cases or case law that has to do with stuff like this?

FLMM is a lawyer i think, harvey birman too maybe they can help.

as far as deadbeats geeting free homes i have no doubt it would be terrible for the neighborhood. i imagine the homes would be be a reflection of the "deadbeatness" of the owners. this could cause serious damage to propery values of those who live nearby

He's clearly correct in this instance (and many others), but the way he says these things makes me wonder why everyone decided to stop calling him Pedobaire; I would think given his behaviour he doesn't really warrant others' deferring to his preferences on grounds of tact and class.

once the contract is considered breached, void what have you, if the legality works out in your favor the bank looses claim to the house and the money they lent. the can no longer legally take the asset back as the loan is null and void. i could be wrong but this is my understanding

You realize there are two documents involved when you mortgage a house, right?
The second that most people don't think about is a lien on the property. Even if the mortgage were somehow to be discharged, the lien has to be removed by the lien holder. That doesn't take place automatically. I understand the whole MERS mess, which really only puts into question who "owns" the mortgage obligation. There still is the property lien to be dealt with.

I can't for the life of me come up with a situation through which a person who quit making their mortgage payments would end up owning the house free of all encumbrances.

You realize there are two documents involved when you mortgage a house, right?
The second that most people don't think about is a lien on the property. Even if the mortgage were somehow to be discharged, the lien has to be removed by the lien holder. That doesn't take place automatically. I understand the whole MERS mess, which really only puts into question who "owns" the mortgage obligation. There still is the property lien to be dealt with.

I can't for the life of me come up with a situation through which a person who quit making their mortgage payments would end up owning the house free of all encumbrances.

the bank has lent money for the buyer to purchase the house. if the title passes at closing the porperty belongs to the buyer. if the buyer defaults on the loan the bank attempts to forclose. if an attorney finds the loan to be void, missing sigs....the bank is now unable collect the loan. they have a lein on the property yes, but the contract providing the lein is void.

this is correct or incorrect? im far from an attorney this is only my understanding as person who has gone through the process of buying a home and from any general knowledge i may have picked up. feel free to point out any mistakes in my logic

Man Who Had No Mortgage Faced Foreclosure Anyway: Ann Woolner Share Business ExchangeTwitterFacebook| Email | Print | A A A Commentary by Ann Woolner Oct. 8 (Bloomberg) -- Jason Grodensky paid cash for a South Florida home last December. With no mortgage and full ownership, he had no fear of foreclosure. And yet, Bank of America foreclosed on the house seven months later, according to the South Florida Sun Sentinel. The court-ordered foreclosure took place July 15. Grodensky tried for months to get answers from the lawyers and lenders involved. He got nowhere until he contacted the newspaper which started poking around. Now, Bank of America says it will straighten out the mess at its own cost, the Sun Sentinel reports. Banks that are suspending foreclosures in much of the country call mistakes in paperwork mere technical errors. This implies that the foreclosures, or most of them, were otherwise on solid legal ground and that any mistakes were the unintended result of trying to handle too many cases in too little time. No harm. No foul, right? Not true. A great deal of harm has been inflicted, and not just on the rare homeowner wrongly judged to be delinquent. What’s happened over the past few years is that the very system of keeping track of who owns what property in the U.S. has been undermined by banks too busy to bother with doing it correctly. This bad record-keeping became an enormous problem for banks when the housing market collapsed and borrowers defaulted. Missing the proper paperwork, foreclosure mills turned out documents misidentifying mortgage holders and containing multiple errors and omissions. Breakdowns Signing hundreds of documents a day, bank personnel never checked for accuracy but said they did, sometimes forging other people’s signatures. Notary publics lied about witnessing those signatures and judges with civil dockets bulging with foreclosure cases didn’t inspect the papers before granting the foreclosures in a matter of seconds. Why worry? Typically, the borrower was a no-show, anyway. (And that’s in the states that offer some judicial protection to the borrower before their homes are taken away. In the rest of the country, no court even pretends to scrutinize documents before foreclosures.) If judges had taken a closer look, they probably would have seen what Judge Arthur M. Schack in Brooklyn found when he actually read the foreclosure papers filed with his court. In one case, for example, Deutsche Bank National Trust Co. filed to foreclose even though it had no legal right to do so, having already sold the mortgage to Goldman Sachs, the judge pointed out in an order. Absent Witness Besides, one of the people signing the documents did so as vice president at two different firms. If he had somehow managed to change jobs on that day, Schack said, it would have been a conflict of interest for him to sign in both capacities. In 46 out of 104 foreclosure motions Schack decided over a two-year span ending last year, the documents were so full of error that he refused to approve the foreclosures, the New York Times reported. As to how many foreclosures he rejects that return later in good form and get approved, “I don’t keep score,” Schack said yesterday in a telephone interview. “Some do come back and do clean up the paper work,” he said. “Others are out there suspended in limbo land.” Skipping Step It’s come to this because banks took a giant record- keeping shortcut to feed the insatiable hunger for securities backed by mortgages. They were too busy to do what had been done throughout U.S. history: record in a public deed room at the county courthouse each time a piece of property changed hands and each time a lien was filed. How archaic that whole county courthouse thing seems, when you can digitize the information and never leave your chair. That’s what banks did in 1997. They created the Mortgage Electronic Registration System, which computerized, centralized and privatized deed records on some 60 million mortgages. The industry saved an estimated $1 billion in fees over the next decade. “They simply dispensed with the recording system and have transferred what appears to look like trillions of dollars of real property without recording them,” says U.S. Representative Alan Grayson, a Florida Democrat who’s been digging into the issue. He points out that this deprived local governments of tax revenue from the transfers. It also deprives the public of accurate, accessible records of property ownership. Grodensky’s Problem While deed records were handed off to the electronic registration system, the borrower’s note promising to pay was sent on a circuitous route from loan originator to other mortgage firms and banks until it was pooled with other mortgages into trusts underwritten by banks and sold to investors. For Jason Grodensky, the problem was that foreclosure proceedings that began before he bought the house in a short sale continued after he got ownership. His case is probably rare. But the mortgage industry’s cavalier attitude toward rules and record-keeping is too common, too systemic, too long-running and too damaging to be sure of that. And in any case, it can’t be called mere technical error. (Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.) To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net Last Updated: October 7, 2010 21:00